Eager to sell the world more phones, and stung by allegations that its Chinese origins might make it a security threat – allegations it strongly denies – Huawei is attempting to remake itself as a company far beyond its roots in southern China. Its main ambition now is to “build a globally leading brand for smart devices that is loved and trusted by consumers,” Eric Xu, one of its rotating triumvirate of chief executives, said Wednesday at the company’s annual investor conference.

The company just has to figure out how, a challenge that will involve sorting out how to make a Chinese brand appeal to a global audience.

[…] Yet the company, like many in China, faces a difficult path to global hearts and minds. Mr. Xu, for example, said Huawei “will not engage in a significant advertising campaign. Instead, we want to leverage word of mouth to gradually build our brand.” Huawei wants to raise its worldwide brand recognition by 58 per cent this year. But the plans it describes offer few clear details. In detailing its mobile phone strategy, for example, Huawei showed a complex flowchart with goals like “establish accessible premium credentials.” [Source]

Xi made a point of thanking Obama for U.S. help in searching for the missing Malaysian Airlines flight which had a large number of Chinese passengers. He said the two countries should address common challenges in a spirit of mutual cooperation.

“China is firmly committed to … building a new model of major country relations,” he said, according to a translator. “We are committed to our position of no confrontation… mutual respect, and win-win cooperation with regard to the United States.”

Obama also thanked Xi for hosting his wife and daughters, who are touring China.

“She also played some table tennis, although I think this was not the high level ping pong diplomacy that we saw in the past,” Obama joked about his wife. [Source]

In the private session with Chinese President Xi Jinping, Obama defended the National Security Agency’s espionage tactics days after news broke that the U.S. spy agency had tapped into Chinese telecommunication giant Huawei’s computer system. The revelation, stemming from documents leaked by NSA contractor Edward Snowden, appeared to undermine Obama’s regular complaint that Chinese companies conduct corporate espionage and intellectual property theft.

Deputy National Security Advisor Ben Rhodes said Xi raised the matter, which was reported by the New York Times and Der Spiegel on Saturday. The president countered that “the United States does not engage in espionage to gain a commercial advantage,” Rhodes said, adding that Obama said the U.S. believes there’s “a clear distinction between intelligence activities that have a national security purpose and intelligence activities that have a commercial purpose. [Source]

]]>http://chinadigitaltimes.net/2014/03/obama-xi-michelles-diplomacy-high-level/feed/0China Reacts to Reports About NSA, Huaweihttp://chinadigitaltimes.net/2014/03/china-reacts-reports-nsa-hacking-huawei/
http://chinadigitaltimes.net/2014/03/china-reacts-reports-nsa-hacking-huawei/#commentsTue, 25 Mar 2014 01:11:38 +0000http://chinadigitaltimes.net/?p=170654After revelations from documents provided by Edward Snowden that the National Security Agency hacked into the servers of Chinese telecom giant Huawei, the Chinese government on Monday called on the United States for an explanation. From Andrew Jacobs of The New York Times:

On Monday, a Chinese Foreign Ministry spokesman expressed “serious concern” over the news reports about the N.S.A. and Huawei, and called on both countries to step up efforts to end the spying.

“We always believe that Internet communication technology should be employed for a country’s social-economic development, rather than Internet espionage and monitoring,” said Hong Lei, a spokesman for the ministry. “China has also consistently advocated that the international community should work together to draw up relevant regulations to build a peaceful, secure, open and cooperative cyberspace.”

Reaction to the news reports was relatively muted in the Chinese state media. There was limited coverage on the nation’s main news portals, and almost none of the indignant commentary that is often seen after such disclosures.

The relative absence of invective may have to do with timing. Michelle Obama arrived here last Thursday with her mother and two daughters for a weeklong tour of China, and President Xi Jinping met with President Obama on Monday afternoon on the sidelines of the Nuclear Security Summit at The Hague. [Source]

“Corporate networks are under constant probe and attack from different sources – such is the status quo in today’s digital age,” said Suffolk, defending Huawei’s independence and security record, saying it was very successful in 145 countries.

[…] “We certainly don’t build ‘back doors’,” Huawei security chief Suffolk said. Suffolk, who is British, said the company never handed over its source codes to governments either.

“I can’t say what American firms do. We have never been asked to hand over any data to a government or authority or to facilitate access to our technology,” he said. “And we wouldn’t do this either. Our position on this point is very clear.” [Source]

But even as the United States made a public case about the dangers of buying from Huawei, classified documents show that the National Security Agency was creating its own back doors — directly into Huawei’s networks.

The agency pried its way into the servers in Huawei’s sealed headquarters in Shenzhen, China’s industrial heart, according to N.S.A. documents provided by the former contractor Edward J. Snowden. It obtained information about the workings of the giant routers and complex digital switches that Huawei boasts connect a third of the world’s population, and monitored communications of the company’s top executives.

One of the goals of the operation, code-named “Shotgiant,” was to find any links between Huawei and the People’s Liberation Army, one 2010 document made clear. But the plans went further: to exploit Huawei’s technology so that when the company sold equipment to other countries — including both allies and nations that avoid buying American products — the N.S.A. could roam through their computer and telephone networks to conduct surveillance and, if ordered by the president, offensive cyberoperations.[Source]

The report comes from a document provided by the former NSA contractor Edward Snowden and disclosed by the New York Times and Der Spiegel. It will add to embarrassment in US government circles, in light of an October 2012 US House of Representatives intelligence committee report which said US firms should avoid doing business with Huawei and another Chinese telecoms company, ZTE, because they posed a national security threat.

[…] At the time of the 2012 House report’s release, intelligence committee chairman Mike Rogers said in comments broadcast on the CBS programme 60 Minutes: “Find another vendor [than Huawei] if you care about your intellectual property; if you care about your consumers’ privacy and you care about the national security of the United States of America.”

In July 2013 Huawei rebutted such claims – the former CIA director General Michael Hayden also said he believed the company supplied information to the Chinese government – calling them “racist”. The same month, the UK government opened a review of the firm. In October 2013, the company’s deputy chairman, Ken Hu, denied ever having been told to spy on customers. [Source]

Luckily for concerned netizens and corporations a spokeswoman for the U.S. assured the Times that any spying was only done for national security purposes.

“We do not give intelligence we collect to U.S. companies to enhance their international competitiveness or increase their bottom line,” White House spokesperson Caitlin M. Hayden told the Times. “Many countries cannot say the same.”

Meanwhile, the unintended comedy of the situation was not lost on Huawei, whose spokesman issued the following statement to Spiegel:

“If it is true, the irony is that exactly what they are doing to us is what they have always charged that the Chinese are doing through us,” [said Bill Plummer, Huawei spokesman]. “If such espionage has been truly conducted, then it is known that the company is independent and has no unusual ties to any government and that knowledge should be relayed publicly to put an end to an era of mis- and disinformation.” [Source]

The bill, signed by President Barack Obama on Friday, included a cyber-espionage review process for federal purchases of technology from China, a measure incorporated last year amid growing U.S. concern over Chinese cyber attacks.

In a weekend statement, China’s Commerce Ministry said the move “went against the principles of fair trade” as it sought to curb purchases of Chinese technology and export of satellites and parts to China.

“China is resolutely opposed,” the ministry said in comments attributed to an unnamed official in its U.S. trade division. [Source]

That approval must take into account “any risk associated with such system being produced, manufactured or assembled by one or more entities that are owned, directed or subsidized” by China, it says.

Representative Frank Wolf, the Republican chairman of the House Appropriations Commerce-Justice-Science subcommittee, said he directed the language to be included last year because of concerns about potential cyberthreats from Chinese companies such as Huawei and ZTE.

Mr. Wolf cited a 2012 congressional intelligence report that found such companies were closely connected to China’s army, which coordinates cyberespionage against the United States. [Source]

]]>http://chinadigitaltimes.net/2014/01/china-decries-u-s-spending-bill/feed/0Apple Plans to Deepen China Mobile Alliancehttp://chinadigitaltimes.net/2014/01/apple-signals-plans-broaden-china-mobile-alliance/
http://chinadigitaltimes.net/2014/01/apple-signals-plans-broaden-china-mobile-alliance/#commentsThu, 16 Jan 2014 02:22:49 +0000http://chinadigitaltimes.net/?p=167761The Wall Street Journal reports from Beijing, where Apple CEO Tim Cook and China Mobile chairman Xi Guohua held a press briefing about a new deal between the American multinational and the world’s largest mobile network:

Apple Inc.’s deal to offer iPhones through China Mobile Ltd. represents a major coup for its chief executive Tim Cook, who signaled Wednesday the company plans to broaden its alliance with the Chinese carrier to grow in the world’s largest smartphone market.

The deal, which took six years of negotiations, is the last piece of the puzzle for Apple in China, officially making iPhones available through all three of the country’s state-run telecom carriers. With preorders for the iPhone through China Mobile already exceeding one million, the agreement will likely boost Apple’s sales in the coming year at a time when its earnings growth is slowing and its global smartphone market share is slipping.

For Apple, the stakes are high in China: the country is the world’s largest smartphone market by shipments and the deal with China Mobile, the biggest carrier, gives it access to an additional 700 million subscribers as well as new sale points. Apple is also currently behind market leader Samsung Electronics Co. 005930.SE -0.23% in terms of market share in China, ranking fifth in the third quarter, according to research firm Canalys.

[…] Despite the deal, Apple faces headwinds in China as high prices for its smartphones and relatively low carrier subsidies have led consumers to buy cheaper options that runGoogle Inc. GOOG -0.07% ‘s Android operating system. According to Apple’s China website, the unsubsidized retail price of a 16-gigabyte iPhone 5S is 5,288 yuan ($870), while an iPhone 5C with the same storage capacity costs CNY4,488 ($738). In comparison, an Android-based phone with similar hardware from startup Xiaomi Inc. costs about $327. [Source]

Q: Are you concerned about growing competition from cheaper handsets in China?

Cook: I’ve always thought it was important for an individual and a company to have a North Star, something that doesn’t change. Many many things can change but the North Star should be clear, and for Apple that’s always been making the best products in the world. That’s our strategy and that’s not changing today or tomorrow or the next day or the next year.

When you really back up and look at what’s happening in China the usage numbers are staggering. Fifty-seven percent of the mobile browsing in China is done on iOS devices. Now there are many different views of unit market share and you can choose to look at whichever one you think is most reputable, but for us that is not our North Star, we don’t get up in the morning saying we want to sell the most, we get up saying we want to make and create the best, and so that’s our strategy and it doesn’t change. [Source]

[…] Woz said he gets paid to speak at events around the world, but that Xiaomi did not pay for his endorsement.

[…] Woz and Lei both took the chance to pose with and discuss some of Xiaomi’s products. Woz is apparently using a Xiaomi Mi3 smartphone now, although it’s unclear how useful it might be outside of China.

“I’m playing with mine. I like it so far. I’ll tell you if I have problems,” Woz said. “Xiaomi has excellent products. They’re good enough to break the American market.” [Source]

In two years, China’s three biggest handset makers – Huawei, ZTE Corp and Lenovo Group Ltd – have vaulted into the top ranks of global smartphone charts, helped in part by their huge domestic market and spurring talk of a new force in the smartphone wars.

Chinese companies took up more showspace at [the Las Vegas Consumer Electronics Show] CES than ever before, eager to tout their products to the world’s largest electronics market. Still, analysts said it will likely take years for the Chinese to make headway in the United States, where arguably the only Asian brand to have succeeded is Samsung Electronics Co Ltd.

Aside from their struggles to get onto store shelves – U.S. carriers sell nine-tenths of the country’s handsets – Chinese handset makers continue to grapple with low brand awareness, perceptions of inferior quality, and even security concerns.

[…] In the third quarter of last year, ZTE and Huawei accounted for 5.7 percent and 3 percent of all phones sold in the United States, respectively, trailing Apple Inc’s 36.2 percent and Samsung’s 32.5 percent, according to IDC. [Source]

In a rare interview on Nov. 25 with French journalists, Ren Zhengfei, the 69-year-old founder and CEO of China-based Huawei, said he would no longer look for business in the United States, in the wake of accusations from lawmakers and government officials that the company is a de facto arm of the Chinese authorities. “If Huawei gets in the middle of U.S-China relations,” and causes problems, “it’s not worth it,” Ren reportedly said, according to a Chinese transcript of the interview. “Therefore, we have decided to exit the U.S. market, and not stay in the middle.”

It wasn’t immediately clear what Ren meant by “exit” the market, but for the company, the U.S. market could easily be described as hostile. Lawmakers have exhorted U.S. firms to stop doing business with Huawei, and federal regulators have tried to block the spread of the company’s equipment in the United States

[…] Ren didn’t say that Huawei was shutting down its U.S. offices or entirely ending a particular line of business. And he claimed that the company’s mobile phone business was going strong. “Our handsets in the United States are still selling well,” Ren said.

“For research and development, and retail handset provision, Huawei will likely stick around” the United States for a long time, said Dan Rosen, a partner and China practice leader at the Rhodium Group, an economic advisory firm. [Source]

Although Huawei has done business with 45 of the world’s top carriers, it failed to get contracts from any leading operators in the US. Last month, Sprint Nextel, the third largest US mobile network operator, and its Japanese suitor, Softbank, both gave assurances to the House intelligence committee that they would not use Huawei equipment.

In October, a US congressional report officially branded Huawei and ZTE, its smaller Chinese peer, a threat to national security. At the time, Representative Mike Rogers, chairman of the House Intelligence Committee, called on the US government and private sector companies to shun Huawei and ZTE.

[…] In 2008, Huawei retracted a bid for 3Com, a US technology company, after it emerged that the proposed deal would not gain regulatory approval in Washington. Two years later, Huawei bid for a multibillion-dollar contract to supply network infrastructure to Sprint Nextel, one of the top US operators, but lost after the US government intervened. It also failed to win bids for other US telecom assets and, in 2011, was forced to unwind a $2m deal to buy patents from a US company. [Source]

“Our study suggests that the increase in U.S. patents in [China] are to a great extent driven by [multinational companies]from advanced economies and are highly dependent on collaborations with inventors in those advanced economies,” says the report’s authors […].

Why would the China-based teams at Hon Hai and Microsoft be besting Huawei at producing patents? For one thing, there are still “relatively few individuals who have become capable of directing a world-class R&D effort… without many years of exposure to multinational best practice,” as the authors put it. Savvy leaders at multinational companies have used technology advances to guide teams around the world to collaborate with divisions inside China, while benefitting from the cheaper labor.

This, say the researchers, suggests that fears that Chinese innovation is threatening the technological leadership of the US and other advanced economies are overblown.[Source]

“There’s a great deal of concern about Huawei acting to advance the interests of the Chinese government in a strategic sense, which includes not only traditional espionage but as a vehicle for economic espionage,” former Department of Homeland Security secretary Michael Chertoff told FP. “If you build the network on which all the data flows, you’re in a perfect position to populate it with backdoors or vulnerabilities that only you know about, you’re upgrading it, each time you upgrade the network or service it, that’s an opportunity” to install spyware.

“That’s a strategic issue for the countries in Africa and a strategic issue for us,” added Chertoff.

Huawei spokesman William Plummer called such concerns “silliness,” noting that the company “did $35 billion in business last year, 70 percent outside of China. We will not compromise our commercial success for any government.”[Source]

Plummer added that “westerners accusing Huawei of rampant spying “are looking into the ‘mirror’ of the U.S. PRISM and related programs and assuming like activity by other states.” In the podcast “Huawei in Africa: how bad journalism affects the debate,” Editor of the China Africa Project Eric Olander further argued that Reed’s article lacked evidence and “did nothing to advance the discussion about Huawei’s growing role in Africa.”

]]>http://chinadigitaltimes.net/2013/08/huawei-in-africa-new-spy-network/feed/0China Threatens Retaliation for EU Telecom Probehttp://chinadigitaltimes.net/2013/05/china-threatens-retaliation-for-eu-telecom-probe/
http://chinadigitaltimes.net/2013/05/china-threatens-retaliation-for-eu-telecom-probe/#commentsFri, 17 May 2013 04:54:59 +0000http://chinadigitaltimes.net/?p=156203China stepped up its rhetoric against the European Union on Thursday, after Brussels threatened to open anti-dumping investigations into Chinese telecom equipment suppliers Huawei and ZTE. From Paul Mozur and Wayne Ma of The Wall Street Journal:

Chinese Premier Li Keqiang said during a meeting with the Greek Prime Minister that Beijing is closely monitoring EU investigations into China’s solar-panel and wireless-network products, according to state television. Mr. Li also called for Greece to try to persuade the EU to use caution in applying any trade measures.

At a news conference also on Thursday, Shen Danyang, a spokesman for China’s Ministry of Commerce, said China would take necessary measures to defend its mobile-telecommunications equipment companies against any sanctions taken by the EU.

Mr. Shen also said new tariffs on Chinese solar manufacturers, which are set to be announced next month, were akin to “picking up a stone to drop on one’s foot.”

The EU claims that Huawei and ZTE receive subsidies from the Chinese government that enable the companies to sell products below cost and gain market share on global competitors, practices that both companies have denied. From The China Daily:

Huawei, the world’s second-largest telecom equipment maker by revenue, said in a statement: “Huawei is disappointed that the European Commission has taken the unprecedented step of deciding in principle to open the first ever ex-officio dumping and subsidy investigations.”

The company said it always plays fair and wins business and trust through innovative technology and quality service, rather than via pricing or subsidies.

Dai Shu, a spokesman for ZTE, said his company has yet to receive any official letter from the EU and insisted it receives no illegal subsidies to do business in the region.

“This makes one cast doubt on the sincerity of the EU to resolve conflicts through consultations,” Shen said.

EU officials said on Wednesday they have had an open-door policy to the Chinese authorities for more than a year at China’s own request, but that the response had been disappointing so far.

“As we made clear yesterday, the European Commission counts on our Chinese partners to take up the offer of negotiations in a serious manner to find an amicable solution to resolve this situation,” EU trade spokesman John Clancy told Reuters on Thursday.

]]>http://chinadigitaltimes.net/2013/05/china-threatens-retaliation-for-eu-telecom-probe/feed/1Huawei Founder Breaks Silencehttp://chinadigitaltimes.net/2013/05/huawei-founder-breaks-silence/
http://chinadigitaltimes.net/2013/05/huawei-founder-breaks-silence/#commentsFri, 10 May 2013 04:22:01 +0000http://chinadigitaltimes.net/?p=155894The elusive founder and chief executive of Chinese telecom giant Huawei, Ren Zhengfei, gave his first-ever press briefing on Thursday as he held court with local media in Wellington, New Zealand. From The Wall Street Journal:

Until this week, Mr. Ren, 68 years old, had made few public appearances. The last time he was seen speaking at a public event was at a conference last June in St. Petersburg.

Mr. Ren’s first media briefing comes at a time when his company is trying to increase transparency after facing challenges in the U.S., where security concerns raised by lawmakers over the Chinese firm’s network equipment have prevented it from doing any meaningful business. The event also followed Huawei’s recent efforts to make more executives available to the media. When the company released its 2012 annual report last month, two of its most senior executives hosted a roundtable with reporters. Still, improved accessibility of executives made Mr. Ren’s absence even more obvious.

“Mr. Ren was starting to feel more comfortable about speaking with the media,” said Huawei spokesman Scott Sykes. “This is a major step for us.”

“Huawei has no connection to the cyber-security issues the US has encountered in the past, current and future,” he told the reporters.

“Huawei equipment is almost non-existent in networks currently running in the US. We have never sold any key equipment to major US carriers, nor have we sold any equipment to any US government agency,” Mr Ren said.

…

There have been concerns and allegations that Huawei was helping China gather information on foreign states and companies, charges that the firm has denied.

According to a Fairfax Media, one of the outlets to interview Mr Ren, he told reporters that he was confident that no staff member of Huawei would engage in spying even if asked to do so by Chinese agencies.

Ren didn’t reveal much. What is his relationship to the People’s Liberation Army? What role, if any, does the Chinese military have in the ownership or operation of Huawei? Suspicions about that connection drive a lot of the anti-Huawei activity of lawmakers and officials in the U.S. and elsewhere, so Ren could have helped clear the air by talking about the army.

Instead, he described how he became a Communist. He joined the party in 1978, shortly after the Cultural Revolution, and presented himself as an idealist who still believed the era’s serve-the-people rhetoric. “At that time my personal belief was to work hard, dedicate myself or even sacrifice myself for the benefit of ‘the people,’” he said. “Joining the Communist Party was in line with that aspiration.” As for human-rights issues in today’s China, Ren said, “For people like myself who went through the Cultural Revolution and all those complicated times, I think China has gone through tremendous progress.”

Regardless of the future government policy, Chinese citizens and their employers continue to seek out westward connections on their own. Song Jian, a 25-year-old from Henan province in central China, is one of thousands of Chinese engineers who work in the Gulf countries. He helps companies gain access to facilities built by the major Chinese telecom equipment maker Huawei, and his clients, he said, include not only local companies but also American businesses and even a U.S. military base.

In 2011, Huawei’s sales across the Middle East rose 20 percent to $3.22 billion, beating the $2.27 billion generated by Ericsson, the world’s largest maker of telecommunications services by revenue. The Middle East, according to Huawei’s website, is one of the company’s fastest growing markets.

Thanks to the expansion of Chinese companies like Huawei, Song said his firm ranks among the most profitable telecom service companies in Saudi Arabia. His quality of life seems to confirm that; he makes $2,000 a month, a much higher salary than his friends at home, and enjoys the use of a company-rented villa in Dammam where he and a colleague fish on the weekends.

[…]Chinese workers, like the companies they serve, found the opportunities they sought in moving west. But it is still uncertain if they have inspired their government to follow.

]]>http://chinadigitaltimes.net/2013/03/is-china-pivoting-to-the-middle-east/feed/0In Barcelona, Huawei Tells its Storyhttp://chinadigitaltimes.net/2013/03/in-barcelona-huawei-tells-its-story/
http://chinadigitaltimes.net/2013/03/in-barcelona-huawei-tells-its-story/#commentsTue, 05 Mar 2013 11:11:41 +0000http://chinadigitaltimes.net/?p=152315Kevin O’Brien of The New York Times checks in from the Mobile World Congress in Barcelona, where Huawei executive Ryan Ding has offered the press something the telecom giant has often avoided – access to its decision makers:

“We hope that the more people know about Huawei, the more it will help us,” Mr. Ding said through an interpreter in Huawei’s crowded exhibition stand. “It is certainly a positive influence and help with our global business when we are open towards the government, media, customers and the general public.”

For Mr. Ding, a spry, 43-year-old, for Huawei and perhaps for China, now is the time to tell the company’s story, instead of letting others do it for them.

That is a priority for Huawei, which has been virtually shut out of the U.S. market, the world’s biggest for telecommunications equipment, because lawmakers are concerned about its links to the Chinese government and military. A recent spate of hacking incidents tied to the military has not helped its cause.

Huawei denies that it is subsidized by the Chinese government and that its equipment poses a threat. The company says the U.S. blockade, encouraged last year by a congressional committee, is trade protectionism.

]]>http://chinadigitaltimes.net/2013/03/in-barcelona-huawei-tells-its-story/feed/0Huawei Denies Role in Singapore Projecthttp://chinadigitaltimes.net/2013/02/huawei-denies-role-in-project-linked-to-americans-death/
http://chinadigitaltimes.net/2013/02/huawei-denies-role-in-project-linked-to-americans-death/#commentsTue, 19 Feb 2013 09:11:16 +0000http://chinadigitaltimes.net/?p=151599The Financial Times reported last week that the parents of American electronics engineer Shane Todd, who died mysteriously in Singapore just before he was due to leave his job and return to the U.S. last summer, believe he was murdered in connection with his involvement in a project between his Singaporean employer and Chinese telecom giant Huawei. While local police claimed Todd hanged himself, his parents retrieved a hard drive from his apartment that detailed the project and laid seeds of doubt about the official account of his death:

Security and technology experts consulted by the FT reviewed the project plan and all noted its civilian and potential military applications. Robert York, a professor of electrical and computer engineering at the University of California, Santa Barbara – a world leader in GaN research and where Shane earned a doctorate in silicon devices – said it would be “unnerving but not surprising” if Huawei were to be trying to advance its GaN technology. The high-powered amplifier has civilian use but “could be used for a number of military applications: high-powered radar, electronic warfare including signal jamming and even potentially some weapons”, Professor York added.

Shane, it turns out, had deep misgivings about the project he was working on and feared he was compromising US national security. His family wants to know whether that project sent him to his grave.

“IME approached Huawei on one occasion to cooperate with them in the GaN field, but we decided not to accept, and consequently do not have any cooperation with IME related to GaN,” Huawei said in a statement.

…

At the heart of the family’s theory is that Todd was concerned for his safety because of a project with a Chinese company. They believed, through information from his colleagues and from his computer files, that the company was Huawei.

Reuters can’t independently corroborate their views about the role of Huawei or the circumstances of Todd’s death.

…

Huawei declined to say whether they had been working on other projects with IME. Colleagues said shortly after Todd’s death that he had told them at one point he had been working on a project with Huawei but that it was not sensitive or high-level in nature.

Fredrik Bergman ran into a problem when a client in Sweden tried to transfer files to his firm’s headquarters here: Each time, the firm lost its Web connection for an hour or so.

After several weeks of multiple outages a day, he says, the firm solved the puzzle: the files were named for the Swedish town of Falun, where the client was working. Mr. Bergman says his firm thinks the name triggered the filters China’s online censors use to block discussion of Falun Gong, a religious group long banned in China.

[…] The American Chamber of Commerce in China said last year that nearly three-quarters of about 300 businesses it surveyed said unstable Internet access impedes their efficiency. About 40% said China’s censorship efforts have a negative business impact.

[…] “The real question is whether the next administration is going to continue to roll back Internet availability to foreign firms,” [Shaun] Rein said. He said companies are unlikely to pull out of China in any case, but they likely will think twice about moves like shifting their regional headquarters to Beijing from places like Singapore and Hong Kong. “They will still invest in China,” he said. “It just depends on what scale.”

This censorship regime is hurting China’s competitiveness in the internet age. Very often, it is commercial firms that bear the collateral damages. Online portals are frustrated about the energy and time wasted on outsourced censorship tasks from the propaganda department. Chinese web giant Tencent has to work hard to deal with censorship concerns connected with its globally popular chat app WeChat among international users, who are accustomed to sharing information freely. Chinese telecom giants Huawei and ZTE, flagged by the US Congress as security threats on flimsy evidence, are victims of China’s perceived opacity. And investor uncertainty about censorship and over-regulation mean that market performance of Chinese internet companies will never achieve their potential.

More importantly, to the extent that web technologies become essential platforms for learning, collaboration and innovation, China runs serious risks of underachieving its information technology ambitions. Chinese talents are robbed of learning possibilities simply because many foreign websites and tools are blocked. According to a UNESCO report, some open educational resources are out of reach for students and educators in China because they are filtered by the Great Firewall.